Why the push for higher wages could send more jobs overseas
It is the dilemma of almost all Australian families: there is simply not enough money.
Pay rises are hard to come by, but they’re vital if Australians are to keep up with price rises on basic essentials: healthcare, electricity, kids’ education and, more recently, grocery bills.
So in this election campaign, it’s no wonder all political parties are offering to take the pressure off Australian households.
In Labor’s case, it's the promise of tax cuts and increasing wages (child-care workers have been specifically mentioned by Bill Shorten, with not-so-subtle hints that aged-care workers are also deserving). The Coalition is promising even broader tax cuts which have been criticised by the ALP because they include higher-paid workers.
There’s just a few problems with all this. In Labor’s case, if it legislates wage increases, someone else will pay. And with tax cuts, to get the full benefit you have to wait for three elections to pass. That’s a long time for cash-strapped families to tread water.
There is one thing however that’s true: while families might be struggling right now, most have work, and with unemployment close to record lows, in my opinion, it’s best to have an income (even if it is less than you might desire) than to have no income because you are unemployed.
And this is where Australians have to be careful what they wish for.
According to the World Economic Forum, Australia and Luxembourg enjoy the world’s highest minimum wages. But it’s not just those on low pay who are, in world terms, highly paid. It flows right through our workforce.
For our story about wages, I interviewed Lindsay Partridge, CEO of Brickworks – which makes most of Australia’s bricks. He explained his first-hand experience of the current wage dilemma.
Last year Brickworks invested $151 million to buy America’s fourth largest brick-maker, Glen-Gery, based in Pennsylvania. The purchase of Glen-Gery gave Partridge an active comparison of wages between Australia and the US.
He says the wages he pays brick-makers in the US are exactly half what he pays those with identical jobs in Australia.
His bill for gas – also vital in making bricks – is a third. It’s got to the point that Brickworks can make bricks in the US and ship them to Australia more competitively than many of his local brick plants can make them here.
In other words, the debate about wages is also about competitiveness and, like it or not, many of us are competing for work with people thousands of kilometres away.
Lindsay Partridge has another sobering story he wants to share, and he tells it on the grounds of the vast warehouses in Western Sydney that should have been Brickworks’ future quarries.
Partridge’s company now makes more money jointly developing the land to build giant warehouses – among the biggest in Australia – than it does making bricks on the same ground.
The warehouses not only include giant retailers, but also transport companies – among them DHL – where goods made overseas (by workers who are cheaper than those in Australia) are stored and shipped to Australian families.
So highly paid jobs in Australia are slowly being shipped overseas leaving us with… well that’s the big question.
As we were told a number of times during the making of this story, we can’t all be baristas and Uber drivers. Or can we?
You see, as times have gotten tougher and families have needed to pay their bills, more Australians than ever before have taken a second or third job. You could never say Aussies are afraid of hard work. It’s just their first job might not be providing the hours, or income, they need and so the gig economy is giving them a chance to top it up.
And it’s not just that second or third job. It’s also the creation of micro-businesses, taking advantage of technology and companies like DHL to make and ship products around the country and around the world. These days it’s not uncommon for one partner in a relationship to try and hold down a stable job and income, while the other partner plays out their entrepreneurial dream to make some real money for the family.
In other words, the nature of work is changing for all Australian families. This is something your grandparents would be most unused to.
But there is a social cost… family time is eroded; personal time is diminished by this pursuit of work.
That might be okay for a time, but I do wonder, worry even a little, about the longer term consequences.
To watch ‘Work strife balance’ and for more on 60 Minutes, visit the official website.
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